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Mr. Browne: I am listening with care to what the hon. Gentleman says and much of it I agree with. I understood the Secretary of State to say that the figure to which the hon. Gentleman refers was not yet known, so the split could not be specified. If I have misunderstood, perhaps the hon. Gentleman could point that out to me. I, too, am a great advocate of freedom of information, but unless the information exists, it cannot be withheld. Until the negotiations are concluded, the information cannot exist.
Dr. Cable: It is a perfectly fair question. I will happily copy to the hon. Gentleman a letter from a Mrs. J. Spiller of the DSS, who acknowledges that the information is available, but says that she will not disclose it because it is commercially confidential. That is a matter of record.
The Minister for Competitiveness, who has responsibility for postal services, is fond of using an analogy that is quite helpful. He talks about the need for
the Post Office Counters network to achieve a soft landing. One has a mental picture of an aeroplane with him at the controls and the runway in the distance. I think that we can see the outline of the runway, which consists of a new income stream that will come from a mixture of online government, banking services and so on. That is fine and clear. However, the problem with that mental picture is that the Minister is flying an aircraft that has no undercarriage--it has no wheels. The problem with the Government's story is how that landing can take place.One of the key aspects is the replacement of the present income stream with one from banking services. That is an important and welcome part of the story. We need to break down those banking services, to find out what they are, how they will be provided and what benefit the network will derive from them.
The banking services have two distinct elements. One is the 3,000 cash machines, which are welcome if they provide an additional facility. However, there is still a question about the many people--especially in remote areas--who will continue to pay a charge for that service. Even if Barclays and the rest move away from their £2.50 charge, the hidden loyalty charges will remain. The public will not receive a free service--the bank will derive income from it.
A more serious and important development--although it is welcome--is that 10 banks have agreed to use the Post Office Counters network for the provision of banking services. That is an advance and represents a significant new vision for postal services. However, why are the banks doing that? After all, Barclays and the rest are closing down thousands of branches throughout the country. Why are they entering into agreements with the DSS or the Post Office to open up such services? The banks are not charities--as we are painfully aware. Sir Peter Middleton and his chums are the most hard-headed bunch in business. Why are they doing that?
One obvious reason is that the agreements represent an extremely good deal for the banks. Instead of providing traditional bank branches, with all their overheads, security costs and business rates, the banks will acquire a cheap facility inside post offices--while keeping their brand. As the Government are in a weak negotiating position, they will not ask much for that service.
The banks will gain in other ways. As people will be encouraged--we are told that they will not be coerced--to have bank accounts, new accounts will be opened. They will bring the banks deposits and spreads on those deposits. The banks will earn charges. Banks will do extremely well from the shift to automated teller machines, and from the provision of banking services. We should be asking the Government--and they should be asking the banks--whether they are getting the best of that bargain with the banks.
The broader context is important. Many questions are legitimately being asked about the operation of the banking system. The Cruickshank report referred to estimated excess profits of £5 billion--in other words, rates of return to shareholder value that are larger than the market--for an industry that does not run full commercial risks, because, of course, banks and their shareholders are underwritten by the lender of last resort. We are talking
about a system which has excess profits and is not fully competitive muscling in on the closure of the post office network to earn a nice little penny.Although I welcome the vision--the development of the post office network from mere post offices to centres for online government and for banking services--will the banks be required to make sufficient payment to the network for that service? I fully accept and welcome the idea that the taxpayer has to pay a subsidy for the post office network, but the banking system also has a social obligation--to deal with the problem of financial exclusion. Are the Minister and--especially--the Chancellor paying adequate attention to the extent to which the banks, as well as the taxpayer, have a financial obligation to maintain the network as it is?
The key issue raised by Members on both sides is that the post office network needs an absolute guarantee of its future. That guarantee will be partly met from subsidy and when the access provisions are identified. However, until then, the crisis of confidence will continue; asset values will continue to fall; and there will be continued closures in all our constituencies.
4.59 pm
Mr. Robert N. Wareing (Liverpool, West Derby): When I read the first words of the motion--
- That this House condemns the Government's failure to provide a coherent strategy for the future of sub-post offices--
During the Tories' period of office--more specifically, between March 1979 and just before the most recent general election--the number of Crown post offices declined from 1,580 to 606 and the number of sub-post offices from 21,213 to 17,731. In other words, over the 18 years of Tory Governments, there was a reduction of about 3,500 post offices. I therefore find it a bit rich that the Tories now have the audacity to suggest that they are the friends of the sub-postmasters. It was they who wanted to sell 51 per cent. of the shares in Royal Mail--in other words, to privatise Royal Mail--and no doubt it was the widespread outrage that was expressed at the time by employees and customers that caused the then Government to retreat. Frankly, they were more concerned with providing for profit than for public service.
Dr. George Turner (North-West Norfolk): I wonder whether my hon. Friend is aware that, in the Postal Services Bill Committee, the Opposition spokespeople still argued time after time in favour of privatisation as their preferred solution for the Post Office. Is he aware that they are still sticking to that policy? I believe that that was the last time there was a major deputation to Parliament on behalf of the postal services.
Mr. Wareing: I am sure that that is the case, because in a debate in the House on 21 November 1994, the right hon. Member for Henley (Mr. Heseltine), who at the time was Deputy Prime Minister, at column 353, gave us the reason for dropping the privatisation proposal: not that
the then Government did not believe in it, but that there was too small a majority to get it through the House of Commons.
Mr. Brian Cotter (Weston-super-Mare): The hon. Gentleman may share my concern that, in the Committee considering the Postal Services Bill, the Conservative Opposition proposed an amendment to reduce the threshold for the universal requirement for packages from 20 kg to 10 kg. That would have hit hard at the universal service, which is of great importance to rural services and the whole community. It was a clear indication of a desire to privatise.
Mr. Wareing: As I did not serve on the Committee, I did not know that, but it is the sort of thing that I would expect. However, having said that about the attitude of the Tories--who are, in a sense, irrelevant to the debate--I shall move on.
There are very important grounds for concern. The announcement that, gradually, more and more benefit recipients will have to enter the banking system is probably the hottest issue in my constituency and throughout Liverpool.
I should like the Government to review their policy in light of several matters. Those who have a notion that, by the year 2005, a majority of the people in my constituency will have bank accounts fail to take into account the social variations between the area that I represent and other parts of the country.
The Library of the House of Commons published an interesting research document. It shows that it is not so much rural areas that will suffer, although I have no doubt that many villages will face difficulties. If my right hon. Friend the Secretary of State and his colleagues were to examine the research paper, they would see that the 20 constituencies at the top of the vulnerability list are almost all in urban areas.
My constituency is rated the 10th most vulnerable, but what do we mean by most vulnerable? In my constituency, there are 15 post offices and, in 13 of them, more than 40 per cent. of the work is related to the payment of benefits. A substantial proportion--87 per cent.--of the post offices in my constituency depend considerably on benefit work. At the bottom of that league table are constituencies such as South-West Surrey, Sevenoaks, Tunbridge Wells and Kensington and Chelsea. They are richer areas and fewer people in them depend on benefits. The consequences of the switch to payments through bank accounts are likely to be dire for my constituency.
Consideration should be given to social variations, and I recommend that my right hon. Friend the Secretary of State consult the list that I have described. No one is against post offices and the Department of Social Security making use of technological advances, but we must consider in detail how such advances will affect customers and employees.
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